SentinelOne Announces Fourth Quarter Fiscal Year 2024 Financial Results

Revenue increased 38% year-over-year

ARR up 39% year-over-year

SentinelOne, Inc. (NYSE: S) today announced financial results for the fourth quarter and fiscal year 2024 ended January 31, 2024.

“We closed the year on a very strong note and surpassed our fourth quarter top and bottom line expectations. In fiscal year 2024, we delivered industry-leading revenue growth of 47% and operating margin improvement of more than 30 percentage points compared to the prior year,” said Tomer Weingarten, CEO of SentinelOne. “Our pace of innovation and security leadership remain unmatched. Enterprises are selecting SentinelOne at a record pace across endpoint, data, cloud security, and more. We are giving control back to the enterprises through enterprise-wide visibility and autonomous cybersecurity.”

“Once again, we delivered strong top-line growth and margin expansion, showcasing the scale and breadth of our Singularity Platform. We achieved our tenth consecutive quarter of over 25 percentage points of year-over-year operating margin improvement,” said Dave Bernhardt, CFO of SentinelOne. “Building on our fiscal year 2024 outperformance, we aim to maintain our industry-leading growth profile while turning the page on profitability by the end of the year.”

Letter to Shareholders

We have also published a letter to shareholders on the Investor Relations section of our website at investors.sentinelone.com. The letter provides further discussion of our results for the fourth quarter of fiscal year 2024 as well as our first quarter and full fiscal year 2025 financial outlook.

Fourth Quarter Fiscal 2024 Highlights

(All metrics are compared to the fourth quarter of fiscal year 2023 unless otherwise noted)

  • Total revenue increased 38% to $174.2 million, compared to $126.1 million.
  • Annualized recurring revenue (ARR) increased 39% to $724.4 million as of January 31, 2024.
  • Customers with ARR of $100,000 or more grew 30% to 1,133 as of January 31, 2024. Dollar-based net retention rate (NRR) was approximately 115%.
  • Gross margin: GAAP gross margin was 72%, compared to 68%. Non-GAAP gross margin was 78%, compared to 75%.
  • Operating margin: GAAP operating margin was (47)%, compared to (79)%. Non-GAAP operating margin was (9)%, compared to (35)%.
  • Cash flow margin: Operating cash flow margin was (4)%, compared to (18)%. Free cash flow margin was (6)%, 14 percentage points higher compared to (20)%.
  • Cash, cash equivalents, and investments were $1.1 billion as of January 31, 2024.

Full Year Fiscal 2024 Highlights

(All metrics are compared to fiscal year 2023 unless otherwise noted)

  • Total revenue increased 47% to $621.2 million, compared to $422.2 million.
  • Gross margin: GAAP gross margin was 71%, compared to 66%. Non-GAAP gross margin was 77%, compared to 72%.
  • Operating margin: GAAP operating margin was (61)%, compared to (95)%. Non-GAAP operating margin was (19)%, compared to (49)%.

Financial Outlook

We are providing the following guidance for the first quarter of the fiscal year 2025 (ending April 30, 2024), and for the fiscal year 2025 (ending January 31, 2025).

 

Q1FY25

Guidance

 

Full FY2025

Guidance

Revenue

$181 million

 

$812-818 million

Non-GAAP gross margin

77.5%

 

77.5-78.5%

Non-GAAP operating margin

(14)%

 

(6)-(2)%

These statements are forward-looking and actual results may differ materially as a result of many factors. Refer to the below for information on the factors that could cause our actual results to differ materially from these forward-looking statements.

Guidance for non-GAAP financial measures excludes stock-based compensation expense, employer payroll tax on employee stock transactions, amortization expense of acquired intangible assets, acquisition-related compensation costs, restructuring charges, and gains and losses on strategic investments. We have not provided the most directly comparable GAAP measures because certain items are out of our control or cannot be reasonably predicted. Accordingly, a reconciliation of non-GAAP gross margin and non-GAAP operating margin is not available without unreasonable effort.

Webcast Information

We will host a live audio webcast for analysts and investors to discuss our earnings results for the fourth quarter of fiscal year 2024, and outlook for the first quarter of fiscal year 2025 and full fiscal year 2025 today, March 13, 2024, at 2:00 p.m. Pacific Time (5:00 p.m. Eastern Time). The live webcast and a recording of the event will be available on the Investor Relations section of our website at investors.sentinelone.com.

We have used, and intend to continue to use, the Investor Relations section of our website at investors.sentinelone.com as a means of disclosing material nonpublic information and for complying with our disclosure obligations under Regulation FD.

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, which statements involve risks and uncertainties, including but not limited to statements regarding our future growth, execution, competitive position, and future financial and operating performance, including our financial outlook for the first quarter of fiscal year 2025 and our full fiscal year 2025, including non-GAAP gross margin and non-GAAP operating margin; progress towards our long-term profitability targets; and general market trends. The words “believe,” “may,” “will,” “potentially,” “estimate,” “continue,” “anticipate,” “intend,” “could,” “would,” “project,” “target,” “plan,” “expect,” or the negative of these terms and similar expressions are intended to identify forward-looking statements. However, not all forward-looking statements contain these identifying words.

There are a significant number of factors that could cause our actual results to differ materially from statements made in this press release, including but not limited to: our limited operating history; our history of losses; intense competition in the market we compete in; fluctuations in our operating results; actual or perceived network or security incidents against us; our ability to successfully integrate any acquisitions and strategic investments; actual or perceived defects, errors or vulnerabilities in our platform; risks associated with managing our rapid growth; general global market, political, economic, and business conditions, including those related to declining global macroeconomic conditions, interest rate volatility, supply chain disruptions and inflation, actual or perceive instability in the banking sector, potential uncertainty with respect to the federal debt ceiling and budget and potential government shutdowns related thereto, and geopolitical uncertainty, including the effects of the conflicts in the Middle East and Ukraine and the judicial reform in Israel; our ability to attract new and retain existing customers, or renew and expand our relationships with them; the ability of our platform to effectively interoperate within our customers' IT infrastructure; disruptions or other business interruptions that affect the availability of our platform including cybersecurity incidents; the failure to timely develop and achieve market acceptance of new products and subscriptions as well as existing products, subscriptions and support offerings; rapidly evolving technological developments in the market for security products and subscription and support offerings; length of sales cycles; and risks of securities class action litigation.

Additional risks and uncertainties that could affect our financial results are included under the captions “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” set forth in our filings and reports with the Securities and Exchange Commission (“SEC”), including our most recently filed Annual Report on Form 10-K, subsequent Quarterly Reports on Form 10-Q and other filings and reports that we may file from time to time with the SEC, copies of which are available on our website at investors.sentinelone.com and on the SEC’s website at www.sec.gov.

You should not rely on these forward-looking statements, as actual outcomes and results may differ materially from those contemplated by these forward-looking statements as a result of such risks and uncertainties. All forward-looking statements in this press release are based on information and estimates available to us as of the date hereof, and were based on current expectations, estimates, forecasts, and projections as well as the beliefs and assumptions of management. We do not assume any obligation to update the forward-looking statements provided to reflect events that occur or circumstances that exist after the date of this press release or to reflect new information or the occurrence of unexpected events, except as required by law. We may not actually achieve the plans, intentions, or expectations disclosed in our forward-looking statements, and you should not place undue reliance on our forward-looking statements.

Non-GAAP Financial Measures

In addition to our results determined in accordance with GAAP, we believe the following non-GAAP measures are useful in evaluating our operating performance. We use the following non-GAAP financial information to evaluate our ongoing operations and for internal planning and forecasting purposes. We believe that non-GAAP financial information, when taken collectively, with the financial information presented in accordance with GAAP, may be helpful to investors because it provides consistency and comparability with past financial performance. However, non-GAAP financial information is presented for supplemental informational purposes only, has limitations as an analytical tool, and should not be considered in isolation or as a substitute for financial information presented in accordance with GAAP.

Other companies, including companies in our industry, may calculate similarly titled non-GAAP measures differently or may use other measures to evaluate their performance, all of which could reduce the usefulness of our non-GAAP financial measures as tools for comparison. In addition, the utility of free cash flow as a measure of our liquidity is limited as it does not represent the total increase or decrease in our cash balance for a given period.

Reconciliations between non-GAAP financial measures to the most directly comparable financial measure stated in accordance with GAAP are contained below. Investors are encouraged to review the related GAAP financial measures and the reconciliation of these non-GAAP financial measures to their most directly comparable GAAP financial measures and not rely on any single financial measure to evaluate our business.

As presented in the “Reconciliation of GAAP to Non-GAAP Financial Information” table below, each of the non-GAAP financial measures excludes one or more of the following items:

Stock-based compensation expense

Stock-based compensation expense is a non-cash expense that varies in amount from period to period and is dependent on market forces that are often beyond our control. As a result, management excludes this item from our internal operating forecasts and models. Management believes that non-GAAP measures adjusted for stock-based compensation expense provide investors with a basis to measure our core performance against the performance of other companies without the variability created by stock-based compensation as a result of the variety of equity awards used by other companies and the varying methodologies and assumptions used.

Employer payroll tax on employee stock transactions

Employer payroll tax expenses related to employee stock transactions are tied to the vesting or exercise of underlying equity awards and the price of our common stock at the time of vesting, which varies in amount from period to period and is dependent on market forces that are often beyond our control. As a result, management excludes this item from our internal operating forecasts and models. Management believes that non-GAAP measures adjusted for employer payroll taxes on employee stock transactions provide investors with a basis to measure our core performance against the performance of other companies without the variability created by employer payroll taxes on employee stock transactions as a result of the stock price at the time of employee exercise.

Amortization of acquired intangible assets

Amortization of acquired intangible asset expense is tied to the intangible assets that were acquired in conjunction with acquisitions, which results in non‑cash expenses that may not otherwise have been incurred. Management believes excluding the expense associated with intangible assets from non-GAAP measures allows for a more accurate assessment of our ongoing operations and provides investors with a better comparison of period-over-period operating results.

Acquisition-related compensation costs

Acquisition-related compensation costs include cash-based compensation expenses resulting from the employment retention of certain employees established in accordance with the terms of the acquisition of Attivo Networks, Inc. in May 2022 (the Attivo acquisition). Acquisition-related cash-based compensation costs have been excluded as they were specifically negotiated as part of the Attivo acquisition in order to retain such employees and relate to cash compensation that was made either in lieu of stock-based compensation or where the grant of stock-based compensation awards was not practicable. In most cases, these acquisition-related compensation costs are not factored into management's evaluation of potential acquisitions or our performance after completion of acquisitions, because they are not related to our core operating performance. In addition, the frequency and amount of such charges can vary significantly based on the size and timing of acquisitions and the maturities of the businesses being acquired. Excluding acquisition-related compensation costs from non-GAAP measures provides investors with a basis to compare our results against those of other companies without the variability caused by purchase accounting.

Restructuring charges

Restructuring charges primarily relate to severance payments, employee benefits, stock-based compensation, impairment charges related to excess facilities and inventory write-offs. These restructuring charges are excluded from non-GAAP financial measures because they are the result of discrete events that are not considered core-operating activities. We believe that it is appropriate to exclude restructuring charges from non-GAAP financial measures because it enables the comparison of period-over-period operating results from continuing operations.

Gains and losses on strategic investments

Gains and losses on strategic investments relate to the subsequent changes in the recorded value of our strategic investments. These gains and losses are excluded from non-GAAP financial measures because they are the result of discrete events that are not considered core-operating activities. We believe that it is appropriate to exclude gains and losses from strategic investments from non-GAAP financial measures because it enables the comparison of period-over-period net income (loss).

Income tax benefit

We believe that excluding the tax benefit associated with the partial reversal of the valuation allowance against our deferred tax assets for the second quarter of fiscal year 2023 provides our senior management as well as other users of our financial statements with a valuable perspective on the performance and health of the business. This partial reversal relates to the realization of our deferred tax assets used to offset deferred tax liabilities recorded in the Attivo acquisition. This one-time benefit is not indicative of current or future operations and expenses.

Non-GAAP Cost of Revenue, Non-GAAP Gross Profit, Non-GAAP Gross Margin, Non-GAAP Loss from Operations, Non-GAAP Operating Margin, Non-GAAP Net Loss and Non-GAAP Net Loss Per Share

We define these non-GAAP financial measures as their respective GAAP measures, excluding the expenses referenced above. We use these non-GAAP financial measures as part of our overall assessment of our performance, including the preparation of our annual operating budget and quarterly forecasts, to evaluate the effectiveness of our business strategies, and to communicate with our board of directors concerning our financial performance.

Free Cash Flow

We define free cash flow as cash used in operating activities less purchases of property and equipment and capitalized internal-use software costs. We believe free cash flow is a useful indicator of liquidity that provides our management, board of directors, and investors with information about our future ability to generate or use cash to enhance the strength of our balance sheet and further invest in our business and pursue potential strategic initiatives.

Key Business Metrics

We monitor the following key metrics to help us evaluate our business, identify trends affecting our business, formulate business plans, and make strategic decisions.

Annualized Recurring Revenue (ARR)

We believe that ARR is a key operating metric to measure our business because it is driven by our ability to acquire new subscription and consumption and usage-based customers and to maintain and expand our relationship with existing customers. ARR represents the annualized revenue run rate of our subscription and consumption and usage-based agreements at the end of a reporting period, assuming contracts are renewed on their existing terms for customers that are under contracts with us. ARR is not a forecast of future revenue, which can be impacted by contract start and end dates, usage, renewal rates, and other contractual terms. In the first quarter of fiscal year 2024, we adjusted our historical ARR. The adjustment to ARR did not impact historical total bookings or revenue. Further information relating to this adjustment can be found in “Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations, Key Business Metrics” in our Quarterly Report on Form 10-Q filed with the SEC on June 1, 2023.

Customers with ARR of $100,000 or More

We believe that our ability to increase the number of customers with ARR of $100,000 or more is an indicator of our market penetration and strategic demand for our platform. We define a customer as an entity that has an active subscription for access to our platform. We count Managed Service Providers, Managed Security Service Providers, Managed Detection & Response firms, and Original Equipment Manufacturers, who may purchase our products on behalf of multiple companies, as a single customer. We do not count our reseller or distributor channel partners as customers. Based on the adjustments to ARR described above, customers with ARR of $100,000 or more for the prior periods in fiscal year 2023 have been adjusted accordingly.

Dollar-Based Net Retention Rate (NRR)

We believe that our ability to retain and expand the revenue generated from our existing customers is an indicator of the long-term value of our customer relationships and our potential future business opportunities. Dollar-based net retention rate measures the percentage change in our ARR derived from our customer base at a point in time. To calculate these metrics, we first determine Prior Period ARR, which is ARR from the population of our customers as of 12 months prior to the end of a particular reporting period. We calculate Net Retention ARR as the total ARR at the end of a particular reporting period from the set of customers that is used to determine Prior Period ARR. Net Retention ARR includes any expansion, and is net of contraction and attrition associated with that set of customers. NRR is the quotient obtained by dividing Net Retention ARR by Prior Period ARR.

Source: SentinelOne

NYSE: S

Category: Investors

SENTINELONE, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands)

(unaudited)

 

 

January 31,

 

January 31,

 

 

2024

 

 

 

2023

 

Assets

 

 

 

Current assets:

 

 

 

Cash and cash equivalents

$

256,651

 

 

$

137,941

 

Short-term investments

 

669,305

 

 

 

485,584

 

Accounts receivable, net

 

214,322

 

 

 

151,492

 

Deferred contract acquisition costs, current

 

54,158

 

 

 

37,904

 

Prepaid expenses and other current assets

 

102,895

 

 

 

101,812

 

Total current assets

 

1,297,331

 

 

 

914,733

 

Property and equipment, net

 

48,817

 

 

 

38,741

 

Operating lease right-of-use assets

 

18,474

 

 

 

23,564

 

Long-term investments

 

204,798

 

 

 

535,422

 

Deferred contract acquisition costs, non-current

 

71,640

 

 

 

55,536

 

Intangible assets, net

 

122,903

 

 

 

145,093

 

Goodwill

 

549,411

 

 

 

540,308

 

Other assets

 

8,033

 

 

 

5,516

 

Total assets

$

2,321,407

 

 

$

2,258,913

 

Liabilities and Stockholders’ Equity

 

 

 

Current liabilities:

 

 

 

Accounts payable

$

6,759

 

 

$

11,214

 

Accrued liabilities

 

104,671

 

 

 

100,015

 

Accrued payroll and benefits

 

74,345

 

 

 

54,955

 

Operating lease liabilities, current

 

4,689

 

 

 

3,895

 

Deferred revenue, current

 

399,603

 

 

 

303,200

 

Total current liabilities

 

590,067

 

 

 

473,279

 

Deferred revenue, non-current

 

114,930

 

 

 

103,062

 

Operating lease liabilities, non-current

 

18,239

 

 

 

23,079

 

Other liabilities

 

4,128

 

 

 

2,788

 

Total liabilities

 

727,364

 

 

 

602,208

 

Stockholders’ equity:

 

 

 

Preferred stock

 

 

 

 

 

Class A common stock

 

27

 

 

 

21

 

Class B common stock

 

3

 

 

 

8

 

Additional paid-in capital

 

2,934,607

 

 

 

2,663,394

 

Accumulated other comprehensive loss

 

(1,550

)

 

 

(6,367

)

Accumulated deficit

 

(1,339,044

)

 

 

(1,000,351

)

Total stockholders’ equity

 

1,594,043

 

 

 

1,656,705

 

Total liabilities and stockholders’ equity

$

2,321,407

 

 

$

2,258,913

 

 

 

 

 

SENTINELONE, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except share and per share data)

(unaudited)

 

 

Three Months Ended

January 31,

 

Twelve Months Ended

January 31,

 

 

2024

 

 

 

2023

 

 

 

2024

 

 

 

2023

 

Revenue

$

174,175

 

 

$

126,096

 

 

$

621,154

 

 

$

422,179

 

Cost of revenue(1)

 

48,266

 

 

 

39,771

 

 

 

179,281

 

 

 

144,177

 

Gross profit

 

125,909

 

 

 

86,325

 

 

 

441,873

 

 

 

278,002

 

Operating expenses:

 

 

 

 

 

 

 

Research and development(1)

 

56,446

 

 

 

53,904

 

 

 

218,176

 

 

 

207,008

 

Sales and marketing(1)

 

101,478

 

 

 

87,254

 

 

 

397,160

 

 

 

310,848

 

General and administrative(1)

 

46,822

 

 

 

45,197

 

 

 

198,247

 

 

 

162,722

 

Restructuring(1)

 

2,377

 

 

 

 

 

 

6,706

 

 

 

 

Total operating expenses

 

207,123

 

 

 

186,355

 

 

 

820,289

 

 

 

680,578

 

Loss from operations

 

(81,214

)

 

 

(100,030

)

 

 

(378,416

)

 

 

(402,576

)

Interest income

 

11,979

 

 

 

9,906

 

 

 

45,880

 

 

 

21,408

 

Interest expense

 

(3

)

 

 

(605

)

 

 

(1,216

)

 

 

(1,830

)

Other income (expense), net

 

(737

)

 

 

(648

)

 

 

918

 

 

 

(1,293

)

Loss before income taxes

 

(69,975

)

 

 

(91,377

)

 

 

(332,834

)

 

 

(384,291

)

Provision for (benefit from) income taxes

 

2,007

 

 

 

2,303

 

 

 

5,859

 

 

 

(5,613

)

Net loss

$

(71,982

)

 

$

(93,680

)

 

$

(338,693

)

 

$

(378,678

)

Net loss per share attributable to Class A and Class B common stockholders, basic and diluted

$

(0.24

)

 

$

(0.33

)

 

$

(1.15

)

 

$

(1.36

)

Weighted-average shares used in computing net loss per share attributable to Class A and Class B common stockholders, basic and diluted

 

301,356,227

 

 

 

283,545,048

 

 

 

294,923,536

 

 

 

277,802,861

 

 

 

 

 

 

 

 

 

(1) Includes stock-based compensation expense as follows:

 

 

 

 

 

 

 

Cost of revenue

$

4,617

 

 

$

3,011

 

 

$

17,187

 

 

$

10,093

 

Research and development

 

15,179

 

 

 

13,817

 

 

 

61,055

 

 

 

51,771

 

Sales and marketing

 

15,436

 

 

 

11,138

 

 

 

55,798

 

 

 

40,115

 

General and administrative

 

18,330

 

 

 

18,182

 

 

 

83,890

 

 

 

62,487

 

Restructuring

 

 

 

 

 

 

 

(1,060

)

 

 

 

Total stock-based compensation expense

$

53,562

 

 

$

46,148

 

 

$

216,870

 

 

$

164,466

 

SENTINELONE, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

(unaudited)

 

 

Twelve Months Ended

January 31,

 

 

2024

 

 

 

2023

 

CASH FLOW FROM OPERATING ACTIVITIES:

 

 

 

Net loss

$

(338,693

)

 

$

(378,678

)

Adjustments to reconcile net loss to net cash used in operating activities:

 

 

 

Depreciation and amortization

 

38,912

 

 

 

29,721

 

Amortization of deferred contract acquisition costs

 

48,682

 

 

 

36,417

 

Non-cash operating lease costs

 

4,020

 

 

 

3,559

 

Stock-based compensation expense

 

216,870

 

 

 

164,466

 

Accretion of discounts, and amortization of premiums on investments, net

 

(19,943

)

 

 

(12,217

)

Net gain on strategic investments

 

(2,703

)

 

 

 

Other

 

4,637

 

 

 

(1,187

)

Changes in operating assets and liabilities, net of effects of acquisitions

 

 

 

Accounts receivable

 

(61,949

)

 

 

(44,442

)

Prepaid expenses and other assets

 

(1,207

)

 

 

(14,499

)

Deferred contract acquisition costs

 

(81,039

)

 

 

(61,289

)

Accounts payable

 

(4,499

)

 

 

3,670

 

Accrued liabilities

 

4,271

 

 

 

4,976

 

Accrued payroll and benefits

 

19,140

 

 

 

(7,205

)

Operating lease liabilities

 

(4,410

)

 

 

(5,320

)

Deferred revenue

 

108,197

 

 

 

92,496

 

Other liabilities

 

1,340

 

 

 

(3,755

)

Net cash used in operating activities

 

(68,374

)

 

 

(193,287

)

CASH FLOW FROM INVESTING ACTIVITIES:

 

 

 

Purchases of property and equipment

 

(1,304

)

 

 

(4,953

)

Purchases of intangible assets

 

(3,505

)

 

 

(407

)

Capitalization of internal-use software

 

(13,956

)

 

 

(13,452

)

Purchases of investments

 

(466,253

)

 

 

(1,938,007

)

Sales and maturities of investments

 

639,193

 

 

 

925,185

 

Cash paid for acquisitions, net of cash and restricted cash acquired

 

(13,585

)

 

 

(281,032

)

Net cash provided by (used in) investing activities

 

140,590

 

 

 

(1,312,666

)

CASH FLOW FROM FINANCING ACTIVITIES:

 

 

 

Payments of deferred offering costs

 

 

 

 

(186

)

Proceeds from exercise of stock options

 

28,317

 

 

 

17,335

 

Proceeds from issuance of common stock under the employee stock purchase plan

 

19,147

 

 

 

19,159

 

Net cash provided by financing activities

 

47,464

 

 

 

36,308

 

EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS

 

 

 

 

 

NET CHANGE IN CASH, CASH EQUIVALENTS, AND RESTRICTED CASH

 

119,680

 

 

 

(1,469,645

)

CASH, CASH EQUIVALENTS, AND RESTRICTED CASH–Beginning of period

 

202,406

 

 

 

1,672,051

 

CASH, CASH EQUIVALENTS, AND RESTRICTED CASH–End of period

$

322,086

 

 

$

202,406

 

SENTINELONE, INC.

RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL INFORMATION

(in thousands, except percentages and per share data)

(unaudited)

 

 

Three Months Ended

January 31,

 

Twelve Months Ended

January 31,

 

 

2024

 

 

 

2023

 

 

 

2024

 

 

 

2023

 

Cost of revenue reconciliation:

 

 

 

 

 

 

 

GAAP cost of revenue

$

48,266

 

 

$

39,771

 

 

$

179,281

 

 

$

144,177

 

Stock-based compensation expense

 

(4,617

)

 

 

(3,011

)

 

 

(17,187

)

 

 

(10,093

)

Employer payroll tax on employee stock transactions

 

(149

)

 

 

(35

)

 

 

(389

)

 

 

(85

)

Amortization of acquired intangible assets

 

(5,139

)

 

 

(5,139

)

 

 

(20,389

)

 

 

(15,957

)

Acquisition-related compensation

 

(120

)

 

 

(130

)

 

 

(499

)

 

 

(424

)

Inventory write-offs due to restructuring

 

 

 

 

 

 

 

(720

)

 

 

 

Non-GAAP cost of revenue

$

38,241

 

 

$

31,456

 

 

$

140,097

 

 

$

117,618

 

 

 

 

 

 

 

 

 

Gross profit reconciliation:

 

 

 

 

 

 

 

GAAP gross profit

$

125,909

 

 

$

86,325

 

 

$

441,873

 

 

$

278,002

 

Stock-based compensation expense

 

4,617

 

 

 

3,011

 

 

 

17,187

 

 

 

10,093

 

Employer payroll tax on employee stock transactions

 

149

 

 

 

35

 

 

 

389

 

 

 

85

 

Amortization of acquired intangible assets

 

5,139

 

 

 

5,139

 

 

 

20,389

 

 

 

15,957

 

Acquisition-related compensation

 

120

 

 

 

130

 

 

 

499

 

 

 

424

 

Inventory write-offs due to restructuring

 

 

 

 

 

 

 

720

 

 

 

 

Non-GAAP gross profit

$

135,934

 

 

$

94,640

 

 

$

481,057

 

 

$

304,561

 

 

 

 

 

 

 

 

 

Gross margin reconciliation:

 

 

 

 

 

 

 

GAAP gross margin

 

72

%

 

 

68

%

 

 

71

%

 

 

66

%

Stock-based compensation expense

 

3

%

 

 

2

%

 

 

3

%

 

 

2

%

Employer payroll tax on employee stock transactions

 

%

 

 

%

 

 

%

 

 

%

Amortization of acquired intangible assets

 

3

%

 

 

4

%

 

 

3

%

 

 

4

%

Acquisition-related compensation

 

%

 

 

%

 

 

%

 

 

%

Inventory write-offs due to restructuring

 

%

 

 

%

 

 

%

 

 

%

Non-GAAP gross margin

 

78

%

 

 

75

%

 

 

77

%

 

 

72

%

 

 

 

 

 

 

 

 

Research and development expense reconciliation:

 

 

 

 

 

 

 

GAAP research and development expense

$

56,446

 

 

$

53,904

 

 

$

218,176

 

 

$

207,008

 

Stock-based compensation expense

 

(15,179

)

 

 

(13,817

)

 

 

(61,055

)

 

 

(51,771

)

Employer payroll tax on employee stock transactions

 

(202

)

 

 

(86

)

 

 

(669

)

 

 

(250

)

Acquisition-related compensation

 

(594

)

 

 

(437

)

 

 

(1,514

)

 

 

(1,165

)

Non-GAAP research and development expense

$

40,471

 

 

$

39,564

 

 

$

154,938

 

 

$

153,822

 

 

 

 

 

 

 

 

 

Sales and marketing expense reconciliation:

 

 

 

 

 

 

 

GAAP sales and marketing expense

$

101,478

 

 

$

87,254

 

 

$

397,160

 

 

$

310,848

 

Stock-based compensation expense

 

(15,436

)

 

 

(11,138

)

 

 

(55,798

)

 

 

(40,115

)

Employer payroll tax on employee stock transactions

 

(361

)

 

 

(127

)

 

 

(1,112

)

 

 

(505

)

Amortization of acquired intangible assets

 

(2,156

)

 

 

(2,143

)

 

 

(7,972

)

 

 

(6,613

)

Acquisition-related compensation

 

(109

)

 

 

(706

)

 

 

(647

)

 

 

(1,780

)

Non-GAAP sales and marketing expense

$

83,416

 

 

$

73,140

 

 

$

331,631

 

 

$

261,835

 

 

 

 

 

 

 

 

 

General and administrative expense reconciliation:

 

 

 

 

 

 

 

GAAP general and administrative expense

$

46,822

 

 

$

45,197

 

 

$

198,247

 

 

$

162,722

 

Stock-based compensation expense

 

(18,330

)

 

 

(18,182

)

 

 

(83,890

)

 

 

(62,487

)

Employer payroll tax on employee stock transactions

 

(591

)

 

 

(1,002

)

 

 

(1,259

)

 

 

(1,395

)

Amortization of acquired intangible assets

 

 

 

 

(19

)

 

 

(2

)

 

 

(75

)

Acquisition-related compensation

 

 

 

 

(320

)

 

 

(383

)

 

 

(999

)

Non-GAAP general and administrative expense

$

27,901

 

 

$

25,674

 

 

$

112,713

 

 

$

97,766

 

 

 

 

 

 

 

 

 

Restructuring reconciliation:

 

 

 

 

 

 

 

GAAP restructuring expense

$

2,377

 

 

$

 

 

$

6,706

 

 

$

 

Stock-based compensation expense

 

 

 

 

 

 

 

1,060

 

 

 

 

Other restructuring charges

 

(2,377

)

 

 

 

 

 

(7,766

)

 

 

 

Non-GAAP restructuring expense

$

 

 

$

 

 

$

 

 

$

 

 

 

 

 

 

 

 

 

Operating loss reconciliation:

 

 

 

 

 

 

 

GAAP operating loss

$

(81,214

)

 

$

(100,030

)

 

$

(378,416

)

 

$

(402,576

)

Stock-based compensation expense

 

53,562

 

 

 

46,148

 

 

 

216,870

 

 

 

164,466

 

Employer payroll tax on employee stock transactions

 

1,303

 

 

 

1,250

 

 

 

3,429

 

 

 

2,235

 

Amortization of acquired intangible assets

 

7,295

 

 

 

7,301

 

 

 

28,363

 

 

 

22,645

 

Acquisition-related compensation

 

823

 

 

 

1,594

 

 

 

3,043

 

 

 

4,369

 

Inventory write-offs due to restructuring

 

 

 

 

 

 

 

720

 

 

 

 

Other restructuring charges

 

2,377

 

 

 

 

 

 

7,766

 

 

 

 

Non-GAAP operating loss

$

(15,854

)

 

$

(43,737

)

 

$

(118,225

)

 

$

(208,861

)

 

 

 

 

 

 

 

 

Operating margin reconciliation:

 

 

 

 

 

 

 

GAAP operating margin

 

(47

)%

 

 

(79

)%

 

 

(61

)%

 

 

(95

)%

Stock-based compensation expense

 

31

%

 

 

36

%

 

 

35

%

 

 

39

%

Employer payroll tax on employee stock transactions

 

1

%

 

 

1

%

 

 

1

%

 

 

1

%

Amortization of acquired intangible assets

 

4

%

 

 

6

%

 

 

5

%

 

 

5

%

Acquisition-related compensation

 

%

 

 

1

%

 

 

%

 

 

1

%

Inventory write-offs due to restructuring

 

%

 

 

%

 

 

%

 

 

%

Other restructuring charges

 

1

%

 

 

%

 

 

1

%

 

 

%

Non-GAAP operating margin

 

(9

)%

 

 

(35

)%

 

 

(19

)%

 

 

(49

)%

 

 

 

 

 

 

 

 

Net loss reconciliation:

 

 

 

 

 

 

 

GAAP net loss

$

(71,982

)

 

$

(93,680

)

 

$

(338,693

)

 

$

(378,678

)

Stock-based compensation expense

 

53,562

 

 

 

46,148

 

 

 

216,870

 

 

 

164,466

 

Employer payroll tax on employee stock transactions

 

1,303

 

 

 

1,250

 

 

 

3,429

 

 

 

2,235

 

Amortization of acquired intangible assets

 

7,295

 

 

 

7,301

 

 

 

28,363

 

 

 

22,645

 

Acquisition-related compensation

 

823

 

 

 

1,594

 

 

 

3,043

 

 

 

4,369

 

Inventory write-offs due to restructuring

 

 

 

 

 

 

 

720

 

 

 

 

Other restructuring charges

 

2,377

 

 

 

 

 

 

7,766

 

 

 

 

Gain on strategic investments

 

 

 

 

 

 

 

(2,703

)

 

 

 

Income tax benefit

 

 

 

 

 

 

 

 

 

 

(9,667

)

Non-GAAP net loss

$

(6,622

)

 

$

(37,387

)

 

$

(81,205

)

 

$

(194,630

)

 

 

 

 

 

 

 

 

Basic and diluted EPS reconciliation:

 

 

 

 

 

 

 

GAAP net loss per share, basic and diluted

$

(0.24

)

 

$

(0.33

)

 

$

(1.15

)

 

$

(1.36

)

Stock-based compensation expense

 

0.18

 

 

 

0.16

 

 

 

0.74

 

 

 

0.58

 

Employer payroll tax on employee stock transactions

 

 

 

 

 

 

 

0.01

 

 

 

0.01

 

Amortization of acquired intangible assets

 

0.02

 

 

 

0.03

 

 

 

0.10

 

 

 

0.08

 

Acquisition-related compensation

 

 

 

 

0.01

 

 

 

0.01

 

 

 

0.02

 

Inventory write-offs due to restructuring

 

 

 

 

 

 

 

 

 

 

 

Other restructuring charges

 

0.01

 

 

 

 

 

 

0.03

 

 

 

 

Gain on strategic investments

 

 

 

 

 

 

 

(0.01

)

 

 

 

Income tax benefit

 

 

 

 

 

 

 

 

 

 

(0.03

)

Non-GAAP net loss per share, basic and diluted

$

(0.02

)

 

$

(0.13

)

 

$

(0.28

)

 

$

(0.70

)

SENTINELONE, INC.

SELECTED CASH FLOW INFORMATION

(in thousands)

(unaudited)

 

Reconciliation of cash used in operating activities to free cash flow

 

 

Three Months Ended

January 31,

 

Twelve Months Ended

January 31,

 

 

2024

 

 

 

2023

 

 

 

2024

 

 

 

2023

 

GAAP net cash used in operating activities

$

(6,182

)

 

$

(22,069

)

 

$

(68,374

)

 

$

(193,287

)

Less: Purchases of property and equipment

 

(187

)

 

 

(126

)

 

 

(1,304

)

 

 

(4,953

)

Less: Capitalized internal-use software

 

(4,269

)

 

 

(3,173

)

 

 

(13,956

)

 

 

(13,452

)

Free cash flow

$

(10,638

)

 

$

(25,368

)

 

$

(83,634

)

 

$

(211,692

)

 

 

 

 

 

 

 

 

Net cash provided by (used in) investing activities

$

113,029

 

 

$

(66,674

)

 

$

140,590

 

 

$

(1,312,666

)

 

 

 

 

 

 

 

 

Net cash provided by financing activities

$

23,682

 

 

$

16,530

 

 

$

47,464

 

 

$

36,308

 

 

 

 

 

 

 

 

 

Operating cash flow margin

 

(4

)%

 

 

(18

)%

 

 

(11

)%

 

 

(46

)%

Free cash flow margin

 

(6

)%

 

 

(20

)%

 

 

(13

)%

 

 

(50

)%

 

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